How To Lodge A Complaint Against A Moneylender

Dexter Lee August 27, 2022

How To Lodge A Complaint Against A Moneylender

Staying debt-free in the current economic climate is a challenge for many.

When the economy takes a turn for the worse, the last thing you need is to pile on more credit card debt or take soft loans from friends or family members.

So what can you do if you really need a loan at short notice?

Money lenders come to the rescue in this situation due to their dependability and quick loan process.

Unfortunately, some illegal or unlicensed money lenders in Singapore often tarnish the industry’s reputation with their extreme tactics.

Setting out to make a complaint against a money lender who fails to deliver is the first step toward obtaining justice.

Yet, many may not know how to make a complaint about a money lender.

This article will tell you how to make a complaint about a money lender if you find yourself in a dilemma with one.

What Is Unlicensed Moneylending?

Unlicensed moneylending is the process when someone offers to finance your loan but lacks the legal authority to do so.

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    A legal money lender must be registered with the Registry of Moneylenders and have a license to conduct a moneylending business.

    The Registry of Moneylenders oversees the activities of licensed money lenders in Singapore.

    Illicit lenders, also known as loan sharks in Singapore, often give false hopes, poor terms, and charge exorbitant interest rates.

    This causes struggling borrowers to fall behind in their loan repayments.

    Why You Should Engage Licensed Money Lenders

    Your loan application process may go down the drain if you work with unethical money lenders.

    Before working with any lender, check its legitimacy on the Ministry of Law website.

    Here, you can find a compiled and regularly updated list of licensed money lenders in Singapore. There won’t be any sham or blacklisted money lenders in Singapore in this list.

    Here are some traits of licensed money lenders in Singapore:

    Regulated By the Law

    There is a list of laws from the Registry of Moneylenders for licensed money lenders to follow.

    Moreover, licensed lenders must have a good performance in loan processing. This boils down to keeping proper records of all transactions and regularly sending reports to the Registry of Moneylenders.

    Eventually, this enables licensed money lenders to monitor their borrowers’ financial situations and keep them from falling into debt.

    Licensed money lenders must also follow strict lending practices and customer protection regulations.

    Charge Reasonable Interest Rates

    Legally authorised money lenders charge reasonable interest rates because the law constantly scrutinises them.

    Also, their reputation is on the line, especially if they intend to remain strong in the competitive market.

    You can also trust that sanctioned money lenders will not charge other hidden fees. Legally, Singaporeans should not pay more than 4% in monthly interest.

    Allow Foreigners To Borrow

    In Singapore, it is illegal to discriminate against borrowers based on race, gender, or nationality.

    This means that foreigners can also borrow from local lenders without significant restrictions.

    Do Not Charge Fees That Exceed Loan Principal

    Overall charges payable to a Singapore lender should not surpass the principal amount of your loan.

    If the interest rate and other charges add up to $6,000, but you borrow only $1,500, the lender cannot charge you more than $1,500 in fees.

    Offer Up To Six Times Your Monthly Income

    The maximum amount of money you can borrow from a licensed money lender in Singapore is six times your monthly salary – if your yearly income is at least or more than $20,000 regardless of your citizenship status.

    Provide Avenues for Customers To File Complaints

    If you want to make a complaint about a money lender in Singapore, there are resources to help you resolve the issues effectively.

    Contact the Consumer Association of Singapore or any of its offices throughout the island. The association will assist you in filing your complaint and finding solutions.

    If you’re unable to reach an agreement, you can seek mediation from the Singapore Mediation Center.

    They offer free mediation services between two parties in an attempt to resolve their dispute.

    Common Unfair Practices Of Money Lenders

    While the government promotes transparency, unlicensed money lenders in Singapore have unethical practices such as:

            1. Exorbitantly High interest Rates

    Most rogue money lenders in Singapore charge incredibly high interest rates on loans that are disproportionate to the borrowers’ collateral value.

    This takes advantage of the borrower’s dire financial situation. Others charge borrowers for unnecessary services, such as loan arrangement fees, even though the process is free.

    Most frustratingly, others also ask for hidden fees not specified in the contract signed by both parties.

            2. False Or Deceptive Advertising

    Another illegal practice among money lenders is feeding incorrect public information.

    Some rogue lenders falsely claim to be licensed while lacking the necessary credentials to give loans. Others make unrealistic offers to people with poor credit.

            3. Failure To Terminate Pre-authorised Electronic Fund Transfers

    Pre-authorised electronic fund transfers are advanced authorised transactions sent by a consumer regularly.

    Money lenders should not withdraw funds from a borrower’s bank account without permission.

    Once borrowers finish paying their loan installments, the money lender should stop deducting funds. If the deduction continues, this is considered illegal and in violation of the law.

    When To Make A Complaint About A Money Lender

    Here are a few things that should guide you on when to make a complaint about a money lender:

    • Harassment 

    File a complaint with Consumer Protection if a licensed money lender has harassed you. If need be, call the police at 999 or the hotline 1800-924-5664 to report verbal or written threats.

    • Unsolicited Messages 

    You have the right to file a complaint if the lender bombards you with promotional materials or uses deceptive tactics to convince you to borrow from them.

    • Loans Being Processed Virtually

    Even if technology has simplified the process of loan applications, a lender should have a physical address.

    Notify the appropriate authorities if you encounter a lender who fails to give proper contact details or promises to approve your loan online.

    Lenders who promise loans online or through phones are usually loan sharks.

    • Requesting Loan Processing Payment Before Loan Disbursement

    It is common for loan lenders to charge administrative fees. The law dictates that lenders should only deduct the amount from the principal sent to the borrower.

    So make no payments until you have received your loan. If a lender demands money, you can file a complaint with a court or other legal bodies. Here are other red flags:

    • If a money lender charges an interest rate higher than the legal rate of 48% per year
    • If the financier continues EFT transactions without your permission
    • If they fail to pay out your loan in accordance with the terms of the contract

    How To Make A Complaint About A Money Lender

    Firstly, submit your grievances in a form that allows the authorities to understand the nature of your complaint and take appropriate action – the more specific your request, the better.

    Depending on the gravity of your complaints, you can file them with the Consumer Protection Division under the Fair Trading Act.

    What action can Consumer Protection take in response to complaints? It may be able to assist you if you have filed a complaint against a licensed money lender.

    It will examine your complaint and determine whether the lender violated any laws.

    Sometimes, this may involve speaking with both parties in the dispute and gathering evidence from them and any witnesses present during the offense.

    If the body fails to resolve the issue within the agreed-upon time frame, you can take legal action against the money lender.

    You will be required to provide further evidence and pertinent information or documents on the case.

    If your complaint revolves around an illegal practice, such as harassment or intimidation, you may be able to recover money from the money lender.

    Another viable option is filing your complaints with the Registry of Moneylenders. You can contact them by email at or by phone at 1800-2255-529.

    The Registry maintains discretion and never discloses client information to a money lender without permission.

    Before contacting Consumer Protection or filing a police report, try to obtain a copy of the contract. A loan agreement provides vital evidence that helps enhance your chances.

    How Not To Fall For Loan Scams

    For most people, taking out loans is the last resort when other options fail. However, it would be best if you did not fall for the first lender who offers you a loan.

    Remember, the industry has hordes of imposters out there who will only cause you more problems than they solve. Here are some ways to avoid falling prey to loan scams:

    Be Wary of Quick Enticing Offers

    Lenders may take advantage of your urgent need to gain your business. Avoid applying for emergency loans even if you are struggling to stay afloat.

    What’s more, be wary of lenders who promise low interest rates if you apply for a loan within a specific time frame.

    Licensed money lenders have consistent interest rates that rarely change. Furthermore, they approve loans based on personal income and creditworthiness rather than urgency.

    Verify The Lender’s Legality

    Check if the lender is licensed and registered with the appropriate authorities.

    A moneylending license will help to confirm that the lender is legitimate and has followed all legal requirements.

    Make Sure Your Credit History Is Taken Into Consideration

    Legitimate lenders frequently examine previous performance and credit scores to determine a borrower’s financial maturity before giving out loans.

    On the other hand, blacklisted money lenders in Singapore may entice inexperienced borrowers with promises of loans with no requirement of credit history.

    Run to the woods if you come across such an offer.

    Confirm The Lender’s Contact Information

    A legitimate lender should have a physical address and phone number. Scammers never reveal exact physical addresses to hide their tracks in the event of legal action.

    The only way to tell the difference between the real and the fake is to go to the given addresses. This way, you can determine whether a money lender is legitimate or not.

    Take Note Of Overly High Processing Fees

    No money lender in Singapore should charge you a processing fee before the money reaches your bank account.

    If the alleged lender is asking you for processing fees, it is most likely looking to profit from your misery.

    Remember that the processing fee should not exceed 10%, and is taken from the total loan amount when it is disbursed.

    In addition, do not pay for any contract or legal fees.


    While the tips above can help you avoid scams, it is also important to know what Singapore’s law says about moneylending.

    Money lenders, for example, must prepare a legal contract before proceeding with the approval process with the borrower present at their office.

    In addition, the government also prohibits lenders from bombarding citizens with enticing loan promotions.

    Above all, legitimate lenders should not charge hidden payments in addition to legal, late, and processing fees.

    Are you having a serious financial fix and requiring an urgent loan to bail you out?

    Our certified financial analysts at CreditMaster create tailor-made loan packages in an easy and straightforward process.

    Find your way back to financial security with us now.

    Dexter Lee

    Born with a pen in one hand and a keyboard in the other, Dexter's been crafting words into beautiful prose since he was old enough to scribble on his walls (much to his mother's chagrin). He's a self-proclaimed pun master, often leaving his coworkers in stitches with his clever wordplay. He's been known to strike up conversations with strangers and turn their stories into captivating content that keeps readers coming back for more. Despite his unconventional approach to life and work, Dexter takes his job as a content manager very seriously. He knows that every piece of content he produces has the power to make a difference in someone's life, and he's committed to using his words for good.

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